To correct this issue, move the .htaccess file from wp-content/plugins/wp-dbmanager to /mnt/w0108/d40/s38/b026d262/www/fraction/wp-content/backup-db
I have this message and have no clue how to find the place where it is saying to fix this problem. I hope you can help me. I am new to Word Press. Where do I go to find the .htaacess file?

The same here. I've copied the file to the stated folder but the error message remains there. I've repeated and checked everything several times but nothing changes.
Has anyone got a cure for this problem?

Just found the solution and it's unbelievably simple =)
As you know .htaccess files do not have .txt file extension. The htaccess file that is supposed to be moved have .txt extension. What you need to do is to copy the content of htaccess.txt file and paste it into an empty document. After that save this file as .htaccess without any file extension, such as .txt . You can easily do that in Notepad++.

Now all you have to do is to follow instructions and upload this new .htaccess file into the folder that is specified by the plugin error message.

Once I'd followed the steps outlined above (@nicholaszen's recommendation) the main site was fine. However on the other sites I still got the error message (I'm using WP 3.0.3 with MultiSite activated).

I had assumed that since I'm using one database for different sites, setting up the options from the dashboard of the main site was enough. Not so. I went through the menu (in WP dashboard) in each of the sites and set the options for WP-DB manager and now it's fine.